Terry Granger v. the Travelers Home and Marine Ins. Co. ( 2018 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-17-00814-CV
Terry GRANGER,
Appellant
v.
THE TRAVELERS HOME AND MARINE INSURANCE CO.,
Appellee
From the County Court at Law No. 10, Bexar County, Texas
Trial Court No. 2014CV03227
Honorable David J. Rodriguez, Judge Presiding
Opinion by: Patricia O. Alvarez, Justice
Sitting: Sandee Bryan Marion, Chief Justice
Marialyn Barnard, Justice
Patricia O. Alvarez, Justice
Delivered and Filed: December 12, 2018
AFFIRMED
Terry Granger appeals a summary judgment dismissing her breach of contract and common
law fraud causes of action against The Travelers Home and Marine Insurance Company. We
affirm the trial court’s judgment.
BACKGROUND
Granger purchased a Renter’s Insurance Policy from Travelers (the Policy). The Policy
provided coverage against personal property loss caused by theft. The Policy included the
following relevant language:
04-17-00814-CV
SPECIAL PROVISIONS - TEXAS
Section I – Conditions
2. Your Duties After Loss. In case of a loss to covered property, we have no duty
to provide coverage under this policy if the failure to comply with the following
duties is prejudicial to us. These duties must be performed either by you, an
“insured” seeking coverage, or a representative of either.
...
e. Cooperate with us in the investigation of a claim;
...
g. As often as we reasonably require:
(1) Show the damaged property;
(2) Provide us with records and documents we request and permit us to make
copies; and
(3) Submit to examination under oath, while not in the presence of another
“insured”, and sign the same;
...
9. Suit Against Us. No suit or action can be brought against us unless there has
been full compliance with all of the terms under Section I of this policy. Action
brought against us must be started within two years and one day after the cause
of action accrues.
While the Policy was in force, Granger submitted a claim for coverage for the loss of
personal property from an alleged burglary of her rental residence. After Granger’s claim was
made, Travelers notified Granger she was required to complete a proof of loss, provide
documentation of the stolen property, and submit to an examination under oath. Granger failed to
respond to Travelers’s requests. On January 19, 2011, Travelers sent Granger a letter closing her
claim. On October 13, 2014, Granger filed her lawsuit against Travelers alleging breach of
contract.
Travelers filed a motion for summary judgment as a matter of law alleging that Granger’s
breach of contract claims were barred by the Policy’s “two years and one day” limitations
condition. Subsequently, Granger amended her petition to include a common law fraud claim by
which she claimed that her landlord, who she alleges was also an agent for Travelers, falsely
-2-
04-17-00814-CV
represented to her that the limitations period for filing any insurance claim was four years.
Travelers responded by amending its motion for summary judgment to address both the breach of
contract and the common law claims. The trial court granted Travelers’s motion for summary
judgment on both claims.
This appeal followed.
STANDARDS OF REVIEW
“We review a trial court’s grant of summary judgment de novo.” Frost Nat’l Bank v.
Fernandez, 315 S.W.3d 494, 508 (Tex. 2010); accord Joe v. Two Thirty Nine Joint Venture, 145
S.W.3d 150, 157 (Tex. 2004).
A. Traditional Motion
“A traditional summary judgment motion is properly granted where a defendant
conclusively negates at least one essential element of a [plaintiff’s] cause of action.” Henkel v.
Norman, 441 S.W.3d 249, 251 (Tex. 2014) (per curiam); accord Fernandez, 315 S.W.3d at 508;
see TEX. R. CIV. P. 166a(c).
B. No-Evidence Motion
We review a no-evidence summary judgment using a legal sufficiency standard. King
Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003); see also TEX. R. CIV. P. 166a(i).
“When reviewing [either a no-evidence or a traditional motion for] summary judgment, we take
as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and
resolve any doubts in the nonmovant’s favor.” Joe, 145 S.W.3d at 157; accord Strandberg v.
Spectrum Office Bldg., 293 S.W.3d 736, 738 (Tex. App.—San Antonio 2009, no pet.). If the
nonmovant’s summary judgment evidence contains “more than a scintilla of probative evidence
to raise a genuine issue of material fact,” the trial court may not properly grant the no-evidence
motion. Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009).
-3-
04-17-00814-CV
ORDER OF DISCUSSION
Travelers filed a traditional motion for summary judgment on the issue of limitations on
the breach of contract claim, and both a traditional and a no-evidence motion for summary
judgment on the common law fraud claim. For convenience, we will first address the defense of
issue of limitations period pertaining to the breach of contract claim. Then, we will address the
common law fraud claim.
BREACH OF CONTRACT CLAIM
A. Arguments
In her first issue, Granger argues that the Policy’s “two-years-and-one-day” limit is not
supported by consideration. Granger contends that the uncontroverted summary judgment
evidence shows she did not receive consideration for her relinquishment of the four-year
limitations period defined in section 16.051. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.051.
Accordingly, Granger insists, the two-years-and-one-day limitation does not apply to her and her
lawsuit against Travelers is not barred.
Travelers argues that Granger’s contention fails because payment of the premium by the
policyholder is consideration for all of the Policy’s terms and conditions.
We agree with Travelers.
B. Applicable Law
Generally, the limitations period for a breach of contract cause of action is “four years after
the day the cause of action accrues.” See TEX. CIV. PRAC. & REM. CODE ANN. § 16.051; Stine v.
Stewart, 80 S.W.3d 586, 592 (Tex. 2006); Cody Texas, L.P. v. BPL Expl., Ltd., 513 S.W.3d 522,
534 (Tex. App.—San Antonio 2016, pet. denied); Jett v. Trucker Ins. Exch., 952 S.W.2d 108, 109
(Tex. App.—Texarkana 1997, no writ). “However, parties to a transaction may agree to the time
in which a person must file suit on a given cause of action.” Jett, 952 S.W.2d at 109 (citing Culwell
-4-
04-17-00814-CV
v. St. Paul Fire & Marine Ins. Co., 79 S.W.2d 914 (Tex. Civ. App.—Eastland 1935, writ dism’d);
Taylor v. Nat’l Life & Accident Ins. Co., 63 S.W.2d 1082 (Tex. Civ. App.—Amarillo 1933, writ
dism’d)). In the context of insurance policies, “[i]nsurance provisions that limit the time within
which to file a suit to two years and a day are valid and binding.” Id. (citing Bazile v. Aetna Cas.
& Sur. Co., 784 S.W.2d 73, 74 (Tex. App.—Houston [14th Dist.] 1989, writ dism’d)).
C. Analysis
Under Jett, the Policy’s limitation provision of two years and one day to file a cause of
action against Travelers is valid and binding. See id. Granger, however, argues that because there
is no consideration paid for the two-years-and-one-day limitation under the Policy, that provision
is not legally binding and enforceable. Although Granger provides no authority for that
proposition, she claims that her affidavit, in which she states that she did not receive additional
consideration for the forfeiture of the four-year statute of limitations, is uncontroverted evidence
of that fact. We disagree.
In her affidavit, Granger testified as follows:
Travelers did not give me any discount from the costs/premium for the policy, nor
any monetary or other kind of compensation as consideration for my relinquishment
of the four (4) year statute of limitations time period in which to file a breach of
contract lawsuit against Travelers. I did not receive any independent consideration
from Travelers for the shorten[ed] limitations period of two (2) years and a day
contained in the policy.
In the same affidavit, Granger testified she paid the premium for the renter’s policy and
that Travelers issued the Policy. Under the “Agreement” heading in the Declarations portion of
the Policy, Travelers agreed to “provide the insurance described in this policy in return for the
premium and compliance with all applicable provisions of this policy.”
The Policy’s language is unambiguous, and we construe it as a matter of law. See First
Bank v. Brumitt, 519 S.W.3d 95, 105 (Tex. 2017) (“When a contract’s language is unambiguous,
-5-
04-17-00814-CV
courts must ‘construe the contract as a matter of law.’” (quoting Coker v. Coker, 650 S.W.2d 391,
393 (Tex. 1983))). We conclude the premium Granger paid was consideration for all provisions
contained in the Policy, including the two-years-and-one-day limitation provision.
Accordingly, Granger’s argument that additional consideration for the reduction in the
limitations period was necessary fails as a matter of law.
D. Lack of Consideration Argument Fails
Because Granger’s premium payments were consideration for all the Policy’s provisions,
including the two years and one day limitation period, and Granger filed her suit more than two
years and one day after Travelers denied her claim, Granger’s cause of action for breach of contract
is, as a matter of law, barred by the Policy’s limitation period. See TEX. R. CIV. P. 166a(c); Henkel,
441 S.W.3d at 251. We overrule Granger’s first issue.
COMMON LAW FRAUD
We next address Granger’s issue that the trial court erred in granting summary judgment
on her fraud claims against Travelers. Because Travelers filed no-evidence and traditional motions
for summary judgment, we review the no-evidence motion first. See Ford Motor Co. v. Ridgway,
135 S.W.3d 598, 600 (Tex. 2004). If the no-evidence motion was properly granted, we need not
address the traditional motion. See id.A. Pleadings, Summary Judgment Evidence
In her last amended petition, Granger alleged the following:
Defendant’s agent, who was also Plaintiff’s landlord at the time that the policy
was sold to her, and after the theft occurred and during the claims process,
represented to Plaintiff that the limitation for filing any claims was four (4) years.
Defendant’s representation to Plaintiff was material because Plaintiff was not
informed of the two (2) year[s] and a day limitation imposed by the contract at any
time because had she been timely informed of the 2 year[s] and a day limitation
period, she would have filed her lawsuit within the contractual period specified in
the contract with [T]raveler’s Insurance Company. Defendant’s representation to
Plaintiff was a false statement of fact. Defendant made the false representation
-6-
04-17-00814-CV
knowing it was false to Plaintiff. Alternatively, Defendant made the false
representation recklessly, as a positive assertion, and without knowledge of its
truth. Defendant intended for Plaintiff to rely on or had reason to expect Plaintiff
would act in reliance of the false representation. Plaintiff justifiably relied on
Defendant’s false representation when Defendant stated to Plaintiff that the
limitation for filing claims was four (4) years.
Granger’s affidavit filed as summary judgment evidence states as follows:
2. When I purchased my renter’s insurance policy from The Travelers Home
and Marine Insurance Company . . . , I met with Christopher Detweiler an agent of
Travelers and informed him that I wanted to purchase renter’s insurance. Mr.
Detweiler, Traveler’s agent[,] spoke to me about the renter’s insurance policy.
During such conversation, Mr. Detweiler told me that under the policy there was a
four (4) [year] statute of limitations. I relied on Mr. Detweiler’s representation
regarding the four (4) years limitations in making my decision to purchase the
renter’s insurance from Travelers. . . .
3. Even after my losses, I spoke with Mr. Detweiler and at no time did he state
I had only two (2) years and a day following the denial of my claim in which to
bring a lawsuit challenging the denial. It is clear that Mr. Detweiler made the false
representation recklessly, as a positive assertion, to induce me to buy a policy from
Travelers. I relied upon Mr. Detweiler’s representation that the statute of
limitations was four (4) years. Mr. Detweiler’s false representation directly and
proximately caused injury to me, which resulted in damages.
As summary judgment evidence, Travelers filed the Policy, which shows the agent as The
Solutions Group. The Policy does not make any reference to Detweiler. Travelers also produced
part of Granger’s deposition testimony in which she admitted that she had no personal knowledge
of the relationship, if any, between Detweiler and Travelers.
B. Arguments
Granger argues that the trial court erred in granting Travelers’s motion because the
evidence shows that Detweiler, as Travelers’ insurance agent, represented to her that the policy
had a four-year statute of limitations. Granger insists Detweiler had apparent authority to bind
Travelers, and she relied on Detweiler’s material representation when she purchased the Policy.
Therefore, Granger concludes, her cause of action for fraud should not have been summarily
dismissed by the trial court.
-7-
04-17-00814-CV
Travelers argues that any representation made by Detweiler is not binding on Travelers
because there is no evidence of apparent authority; that is, there is no evidence that it authorized
Detweiler to act on its behalf. Travelers concludes that because there is no evidence of apparent
authority, it was entitled to judgment on both its no-evidence and traditional motions.
C. Applicable Law
1. Common Law Fraud Claim
“A common law fraud claim requires ‘a material misrepresentation, which was false, and
which was either known to be false when made or was asserted without knowledge of its truth,
which was intended to be acted upon, which was relied upon, and which caused injury.’” Zorrilla
v. Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) (quoting Formosa Plastics Corp. USA
v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998)).
2. Agency
An agency is the consensual relationship between two parties where one, the
agent, acts on behalf of the other, the principal, and is subject to the principal’s
control. An agency relationship will not be presumed, and the party asserting the
relationship has the burden to prove its existence. In proving the existence of an
agency relationship, it is essential to show that the alleged princip[al] has both the
right (1) to assign the agent’s task, and (2) to control the means and details of the
process by which the agent will accomplish the assigned task.
Schultz v. Rural/Metro Corp. of N.M.-Tex., 956 S.W.2d 757, 760 (Tex. App.—Houston [14th Dist.]
1997, no writ) (citations omitted); see Thomason v. Collins & Aikman Floorcoverings, Inc., No.
04-02-00870-CV, 2004 WL 624926, at *4 (Tex. App.—San Antonio Mar. 31, 2004, pet. denied)
(mem. op.).
3. Apparent Authority
“To establish apparent authority, one must show that a principal either knowingly permitted
an agent to hold itself out as having authority or showed such lack of ordinary care as to clothe the
agent with indicia of authority.” NationsBank, N.A. v. Dilling, 922 S.W.2d 950, 952–53 (Tex.
-8-
04-17-00814-CV
1996) (citing Ames v. Great S. Bank, 672 S.W.2d 447, 450 (Tex. 1984)). On review, we “may
consider only the conduct of the principal leading a third party to believe that the agent has
authority in determining whether an agent has apparent authority.” Id. at 953 (citing Sw. Title Ins.
Co. v. Northland Bldg. Corp., 552 S.W.2d 425, 428 (Tex. 1977)).
“[O]ne seeking to charge the principal through apparent authority of an agent must
establish conduct by the principal that would lead a reasonably prudent person to believe that the
agent has the authority that he purports to exercise.” Biggs v. U.S. Fire Ins. Co., 611 S.W.2d 624,
629 (Tex. 1981); accord Dilling, 922 S.W.2d at 953. “The principal must have affirmatively held
out the agent as possessing the authority or must have knowingly and voluntarily permitted the
agent to act in an unauthorized manner.” Dilling, 922 S.W.2d at 953 (citing Douglass v. Panama,
Inc., 504 S.W.2d 776, 778–79 (Tex. 1974)).
D. Analysis
Granger claims that Detweiler is Travelers’s agent and that his alleged fraud is imputable
to Travelers. The only evidence of Detweiler’s apparent authority that Granger presented was her
affidavit’s conclusory assertion that Detweiler was Travelers’s agent. Contra Ryland Group, Inc.
v. Hood, 924 S.W.2d 120, 122 (Tex. 1996) (“Conclusory affidavits are not enough to raise fact
issues.”). Granger provides no factual foundation for her assertion. Specifically, Granger fails to
state how she learned that Detweiler was Travelers’s agent, whether Detweiler sold or negotiated
the Policy, or how Travelers controlled Detweiler. See Gonzales v. Shing Wai Brass & Metal
Wares Factory, Ltd., 190 S.W.3d 742, 746 (Tex. App.—San Antonio 2005, no pet.) (“A
conclusory statement is one that does not provide the underlying facts to support the conclusion,
and is insufficient to create a question of fact to defeat summary judgment.”). For these reasons,
Granger’s affidavit is conclusory and not proper summary judgment evidence. See Ryland Group,
924 S.W.2d at 122; Gonzales, 190 S.W.3d at 746.
-9-
04-17-00814-CV
Assuming arguendo that Granger’s testimony is proper summary judgment evidence,
Granger failed to produce any summary judgment evidence that an agency relationship existed
between Granger and Travelers. There is no evidence that Travelers assigned Detweiler to present
the Policy to Granger or to explain its conditions, especially the limitations condition, to her. See
Schultz, 956 S.W.2d at 760. There is no evidence that Travelers controlled Detweiler’s tasks. See
id. There is likewise no evidence that Travelers permitted Detweiler to hold himself as an agent
with authority to explain the limitations portion of the Policy or that it knowingly or voluntarily
permitted Detweiler to misstate the limitations period to file a claim against Travelers. See id.
Faced with a no-evidence motion, Granger failed to meet her burden to present some
evidence that established that Detweiler had apparent authority to act for Travelers. See Ridgway,
135 S.W.3d at 600. Having concluded that Travelers’s no-evidence motion for summary judgment
on the common law fraud was properly granted by the trial court, we need not address Travelers’s
traditional motion for summary judgment. See id.
E. Apparent Authority Argument Fails
There is no evidence that any alleged fraud on Detweiler’s part can be imputed to Travelers
under the theory of apparent authority. We overrule Granger’s second issue.
CONCLUSION
Having overruled both of Granger’s issues, we affirm the trial court’s order.
Patricia O. Alvarez, Justice
- 10 -